Test bank for foundations of business 4th edition by pride

Test Bank for Foundations of Business 4th Edition by Pride Complete downloadable file at: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: Moderate pp 4-6 FOBU.PRID.15.1-1 United States - BUSPROG: Analytic Your Future in the Changing World of Business Bloom's: Comprehension How can online networking improve your chances of success in the business world? ANSWER: Answers will vary It may be best to make the most of online networking by identifying and joining sites where you can connect with prospective employers, current and former classmates, and others who may help you spread the word of a job search Online networking can also advance your career by being a part of sites such as Facebook, Twitter, and LinkedIn, among others POINTS: DIFFICULTY: Moderate REFERENCES: p LEARNING OBJECTIVES: FOBU.PRID.15.1-1 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Your Future in the Changing World of Business KEYWORDS: Bloom's: Comprehension An entrepreneur combines four kinds of resources into a business What would be the effect on the business if any one were left out? ANSWER: The four kinds of resources include material resources (raw materials), human resources (people), financial resources (capital and money), and informational resources (information to make decisions and to evaluate a firm’s activities) Every business must work to organize these four resources If one resource is not available or is left out, the business will, most likely, fail since it is the combination and balancing of the four resources that creates business success For example, a manufacturer cannot produce products if there are no raw materials And the other three resources are just as important POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: Moderate p FOBU.PRID.15.1-2 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Business: A Definition KEYWORDS: Bloom's: Comprehension What is profit and why is it important to a business? ANSWER: Profit is what remains after all business expenses have been deducted from sales revenue Sales revenue is the money received from customers in exchange for goods or services In addition, all businesses have expenses which are deducted from revenue, thus, leaving the profit A negative profit, called a loss, cannot be sustained long term for a business to survive If a firm is operating at a loss, management must take action to eliminate the loss, increase sales, and reduce expenses or the firm may be forced to file for bankruptcy protection or go out of business POINTS: DIFFICULTY: Moderate REFERENCES: pp 9-10 LEARNING OBJECTIVES: FOBU.PRID.15.1-2 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Business: A Definition KEYWORDS: Bloom's: Comprehension What three activities must a business perform in order to be successful? Briefly describe each of these and why each is essential to business success ANSWER: A business is the organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs For a business to be successful, it must (1) be organized; (2) make a profit on the goods or services it sells to its customers; and (3) meet the needs of its customers If one or more of the three elements is missing, the business will not be a success POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: Moderate p FOBU.PRID.15.1-2 United States - BUSPROG: Analytic Business: A Definition Bloom's: Comprehension Explain how the notion of scarcity is related to personal as well as business decision making ANSWER: Answers will vary Scarcity refers to the lack of resources—money, time, natural resources, etc.—that are needed to satisfy a want or need Because resources are always scarce, businesses as well as individuals must make decisions based on resource availability Personal decisions such as whether to buy a $5,000 used car versus a $18,500 new car are usually driven by the scarcity of resources and the ability to pay based on the scarcity Business decisions are similar POINTS: DIFFICULTY: Challenging REFERENCES: p 11 LEARNING OBJECTIVES: FOBU.PRID.15.1-3 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Types of Economic Systems KEYWORDS: Bloom's: Application Explain how the basic economic questions are answered in capitalistic and command economies ANSWER: The four basic economic questions are (1) what goods and services will be produced; (2) how will they be produced; (3) for whom will they be produced; and (4) who controls the factors of production In a capitalistic economy, supply and demand is primarily driven by the market and what price a product or service will bring In a capitalistic economy, businesses and individuals answer the four basic economic questions In a command economy, the government decides what goods and services will be produced, how they will be produced, and at what price they will be offered POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: Challenging pp 11-15 FOBU.PRID.15.1-3 United States - AACSB: Reflective Thinking Types of Economic Systems Bloom's: Analysis Why we say that the U.S economy is a mixed economy? ANSWER: The United States economy exhibits elements of both capitalism and socialism, and, therefore, can be deemed a mixed economy The U.S government, for example, participates in the economy as more than simply an umpire or rule maker The U.S government participates in the four basic economic questions—what, how, for whom, and who For example, the government is involved in public schools, social services including subsidized childcare or job-search assistance, and public-private partnerships such as with hospitals or research institutes POINTS: DIFFICULTY: Moderate REFERENCES: p 13 LEARNING OBJECTIVES: FOBU.PRID.15.1-3 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Types of Economic Systems KEYWORDS: Bloom's: Comprehension How does socialism differ from communism? ANSWER: In a socialist economy, the key industries are owned and controlled by the government Private ownership of smaller businesses is often permitted in socialist economies In a communist society, all workers contribute to the economy through government ownership, and management In a communist economy, the four basic economic questions—what, how, for whom, and who—are answered through centralized government plans POINTS: DIFFICULTY: Challenging REFERENCES: pp 14-15 LEARNING OBJECTIVES: FOBU.PRID.15.1-3 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: Types of Economic Systems KEYWORDS: Bloom's: Analysis 10 Why is productivity important? How can a nation's productivity rate be improved? ANSWER: Productivity is the average level of output per worker per hour An increase in productivity results in economic growth because a larger number of goods and services are produced by the labor force Increased productivity growth helps an economy’s businesses to compete more effectively in the global environment due to more goods or services being produced at a lower cost Productivity rates can be improved through technology, advanced employee training, as well as transferring routine functions to other locations, possibly through the Internet POINTS: DIFFICULTY: Moderate REFERENCES: pp 15-16 LEARNING OBJECTIVES: FOBU.PRID.15.1-4 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Measuring Economic Performance KEYWORDS: Bloom's: Comprehension 11 A nation's economy fluctuates instead of growing at a steady pace every year These fluctuations are generally referred to as the business cycle Describe the four different phases of the business cycle ANSWER: The business cycle generally includes four phases: the peak, sometimes called prosperity; recession, two or more consecutive three-month periods of decline in a country’s GDP; the trough, the turning point when a nation’s production and employment bottom out and reach their lowest levels; and recovery, sometimes called expansion POINTS: DIFFICULTY: Moderate REFERENCES: pp 17-19 LEARNING OBJECTIVES: FOBU.PRID.15.1-4 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Measuring Economic Performance KEYWORDS: Bloom's: Comprehension 12 What is the difference between monetary policies and fiscal policies? How does each affect the nation's economy? ANSWER: Monetary policies are the Federal Reserve’s decisions that determine the size of the supply of money in a nation and interest rate levels Fiscal policy is determined by government’s influence in the amount of savings and expenditures of individuals, businesses, and government by altering the tax structure and changing the levels of government spending Some experts believe that effective use of monetary and fiscal policies can speed up recovery and reduce the amount of time the economy is in recession POINTS: DIFFICULTY: Challenging REFERENCES: p 18-19 LEARNING OBJECTIVES: FOBU.PRID.15.1-5 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: The Business Cycle KEYWORDS: Bloom's: Analysis 13 In perfect competition, who sets the price of a product? ANSWER: In perfect competition, there are many buyers and sellers of a product or service and no single buyer or seller is powerful enough to affect prices Therefore, the actions of buyers sets the price of a product since, in theory, all products are the same and buyers will pay the lowest price for the same products POINTS: DIFFICULTY: Moderate REFERENCES: pp 19-20 LEARNING OBJECTIVES: FOBU.PRID.15.1-6 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Types of Competition KEYWORDS: Bloom's: Comprehension 14 Describe how supply and demand affect the price of a product ANSWER: The supply of a product is the quantity of the product that producers are willing to sell at each of various prices Suppliers supply more product when consumers are willing to pay a higher price The demand for a product is the quantity that buyers are willing to purchase at various prices Buyers demand more when a price is low Shifts in demand for a product raise and lower the market price Also, a change in the supply of a product can cause a change in the price for the product POINTS: DIFFICULTY: Moderate REFERENCES: pp 20-21 LEARNING OBJECTIVES: FOBU.PRID.15.1-6 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Types of Competition KEYWORDS: Bloom's: Comprehension 15 In a monopolistic competition setting, how can a manufacturer differentiate a product? ANSWER: Sellers attempt to differentiate their product or service so it is attractive to consumers Product differentiation is the process of developing and promoting differences between one’s products and all competitive products For example, sellers provide unique product features, attention-getting brand or product names, unique and attractive packaging, and services such as free delivery or a lifetime warranty POINTS: DIFFICULTY: Moderate REFERENCES: p 21 LEARNING OBJECTIVES: FOBU.PRID.15.1-6 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Types of Competition KEYWORDS: Bloom's: Comprehension 16 How does a monopoly have complete control over the price of its product? ANSWER: A monopoly has some control over the price of its product because it is the only firm in the industry No firm, however, can set its price at some astronomical figure simply due to lack of competition The firm would find that no customers would be willing to pay an exorbitant price Therefore, the firm in a monopoly position must consider the demand for its product and set the price at the most profitable level POINTS: DIFFICULTY: Moderate REFERENCES: p 22 LEARNING OBJECTIVES: FOBU.PRID.15.1-6 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Types of Competition KEYWORDS: Bloom's: Comprehension 17 What effect did the Industrial Revolution and the golden age of invention have on the development of American business? ANSWER: In the late 1700s, the factory system of manufacturing was born in which all materials, machinery, and workers required to manufacture a product were assembled in one place Specialization was also introduced during the Industrial Revolution Specialization is the separation of a manufacturing process into distinct tasks and the assignment of different tasks to different individuals The years of 1820 to 1900 were considered the golden age of invention and innovation in machinery Many basic characteristics of the modern business system took form during these time periods POINTS: DIFFICULTY: Moderate REFERENCES: p 22-24 LEARNING OBJECTIVES: FOBU.PRID.15.1-7 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: American Business Today KEYWORDS: Bloom's: Comprehension 18 What you consider the most important challenges that American business faces today? ANSWER: Student answers will vary The need to create a stable economy with the creation of new jobs will likely be a continual challenge for the U.S Regulation of banks, savings and loan associations, credit unions, and other financial institutions to prevent abuse will continue to be a challenge Other challenges include reducing national debt, defeating terrorism, and resolving conflict with other countries Using technology to make workers more productive and competitive, preserving small business benefits in a global environment, balancing economic growth with sustainability, and meeting the needs of two-income families, single parents, older Americans, and the less fortunate will also continue to challenge American business POINTS: REFERENCES: p 28 LEARNING OBJECTIVES: FOBU.PRID.15.1-7 NATIONAL STANDARDS: United States - AACSB: Reflective Thinking TOPICS: American Business Today KEYWORDS: Bloom's: Evaluation Satellite Communications Jonathan worked for Satellite Communications for twenty years In the time that he worked there, he learned a lot about the company and how it operated The company met its sales and revenue goals every year However, most of the employees had similar educational and cultural backgrounds He believed that the company could much better if it cultivated an environment that promoted many different ideas Additionally, Satellite Communications was mostly focused on how much revenue it earned in a given year Jonathan felt that the most important goal should be to satisfy customers He believed financial success would result from focusing on customers After a lot of consideration, Jonathan decided to open his own business called Universal Communications and hire employees that reflected a more diverse customer base He was happy to have this opportunity because it was a dream that he had always had He had always wanted to make his own decisions about what his company would produce and how The only aspect of the business he was unsure of was pricing, yet he knew this would be important for his ultimate success 19 Refer to Satellite Communications Jonathan is operating in a and how to things a command economy b mixed environment c market economy d split economy because he has the opportunity to decide what e micro-economy ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: c Moderate p FOBU.PRID.15.1-1 United States - AACSB: Reflective Thinking Your Future in the Changing World of Business Bloom's: Application 20 Refer to Satellite Communications When hiring people, Jonathan thinks it is important to consider a unilateral thinking b profit c wage increases d health benefits e cultural diversity ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: e Easy p FOBU.PRID.15.1-1 United States - BUSPROG: Analytic Your Future in the Changing World of Business Bloom's: Knowledge 21 Refer to Satellite Communications Now that Jonathan plans to open his own business, he needs to look at the factors of production Which of the following is not a factor of production? a Labor b Capital c Machinery d Demand e Entrepreneurship ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: d Easy p 11 FOBU.PRID.15.1-3 United States - BUSPROG: Analytic Types of Economic Systems Bloom's: Knowledge 22 Refer to Satellite Communications Jonathan's success will contribute to society This is referred to as the a objective b market economy c business cycle d invisible hand e standard of living ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: d Moderate p 12 FOBU.PRID.15.1-3 United States - AACSB: Reflective Thinking Types of Economic Systems Bloom's: Application Home Inspirations Hailey works for her father in a family-owned business called Home Inspirations, a bedding company that has been in operation since the 1800s When her father retires, Hailey plans on taking over the business Hailey is aware of many things about the company that she likes, and a few things that she does not She has particularly noted that when the economy has low unemployment and high total income, sales are great However, any other time, sales are not so good Currently, all of the bedding items are created in one place and everyone works on various tasks every day Hailey is thinking about streamlining the production process so that individuals would be responsible for only one task She believes that if production would increase, she could sell her products at a lower price and increase revenue She knows that most bedding products available in the market are very similar in nature and satisfy the same need However, if she were able to lower prices, this might give her company the competitive advantage that it needs She would then be able to invest money in differentiating her products by providing unique features, building the brand name, and offering services such as free delivery She is also considering selling her products on the Internet Hailey knows that her father does not like change very much, but she feels these changes are important for the future of the company 23 Refer to Home Inspirations Hailey noticed that when sales were up, the economy was in a a depression b peak period c grace period d recession e stagnant mode ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: b Moderate p 18 FOBU.PRID.15.1-5 United States - AACSB: Reflective Thinking The Business Cycle Bloom's: Application 217 The recurrence of periods of growth and recession in a nation's economic activity is a depression a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: False Easy p 18 FOBU.PRID.15.1-5 United States - BUSPROG: Analytic The Business Cycle Bloom's: Knowledge 218 During the peak or prosperity stage of a nation's business cycle, businesses are reluctant to offer new products and services a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: TOPICS: NOTES: False Easy p 18 FOBU.PRID.15.1-5 The Business Cycle Bloom's: Knowledge 219 Economists define a recession as two or more consecutive three-month periods of decline in a country's gross domestic product a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: True Easy p 18 LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: FOBU.PRID.15.1-5 United States - BUSPROG: Analytic The Business Cycle Bloom's: Knowledge 220 A depression is a severe recession that lasts longer than a recession a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: True Easy p 18 FOBU.PRID.15.1-5 United States - BUSPROG: Analytic The Business Cycle Bloom's: Knowledge 221 Monetary policies exert the government's influence on the amount of savings and expenditures by altering the tax structure and changing the levels of government spending a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: False Easy p 18 FOBU.PRID.15.1-5 United States - BUSPROG: Analytic The Business Cycle Bloom's: Knowledge 222 The national debt in the United States is about $1.1 trillion a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: False Easy p 19 LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: FOBU.PRID.15.1-5 United States - BUSPROG: Analytic The Business Cycle Bloom's: Knowledge 223 Basically, there are four recognized degrees of competition: perfect competition, monopolistic competition, oligopoly, and monopoly a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: True Easy p 19 FOBU.PRID.15.1-6 United States - BUSPROG: Analytic Types of Competition Bloom's: Knowledge 224 Perfect competition is the market situation in which a product has many buyers and sellers, and no single buyer or seller is powerful enough to affect a product's price a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: True Easy p 19 FOBU.PRID.15.1-6 United States - BUSPROG: Analytic Types of Competition Bloom's: Knowledge 225 As the price of a product increases, the amount of the product that a producer is willing to supply increases a True b False ANSWER: POINTS: DIFFICULTY: True Moderate REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: pp 20-21 FOBU.PRID.15.1-6 United States - BUSPROG: Analytic Types of Competition Bloom's: Comprehension 226 As the price of a product increases, the amount of the product that consumers purchase increases a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: False Moderate pp 20-21 FOBU.PRID.15.1-6 United States - BUSPROG: Analytic Types of Competition Bloom's: Comprehension 227 The equilibrium or market price exists when the supply of a product exceeds the amount that consumers are willing to purchase a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: False Easy p 21 FOBU.PRID.15.1-6 United States - BUSPROG: Analytic Types of Competition Bloom's: Knowledge 228 The products available in a monopolistically competitive market are similar in nature and are intended to satisfy the same need a True b False ANSWER: POINTS: DIFFICULTY: True Easy REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: p 21 FOBU.PRID.15.1-6 United States - BUSPROG: Analytic Types of Competition Bloom's: Knowledge 229 An oligopoly is a market situation in which there is one producer and a few large buyers a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: False Easy p 21 FOBU.PRID.15.1-6 United States - BUSPROG: Analytic Types of Competition Bloom's: Knowledge 230 In a monopoly situation, there is no close substitute for the product or service a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: True Easy p 22 FOBU.PRID.15.1-6 United States - BUSPROG: Analytic Types of Competition Bloom's: Knowledge 231 A copyright of a product exists indefinitely a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: False Moderate p 22 FOBU.PRID.15.1-6 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: Types of Competition KEYWORDS: Bloom's: Comprehension 232 A legal monopoly is often referred to as a natural monopoly a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: False Easy p 22 FOBU.PRID.15.1-6 United States - BUSPROG: Analytic Types of Competition Bloom's: Knowledge 233 A factory system of manufacturing involves the separation of a manufacturing process into separate tasks and the assignment of different tasks to different employees a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: False Moderate p 23 FOBU.PRID.15.1-7 United States - BUSPROG: Analytic American Business Today Bloom's: Comprehension 234 Specialization is meant to increase the efficiency of industrial workers a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: True Moderate p 23 LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: FOBU.PRID.15.1-7 United States - BUSPROG: Analytic American Business Today Bloom's: Comprehension 235 Typical service businesses in the U.S include real estate, repair companies, and restaurants a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: True Easy p 24 FOBU.PRID.15.1-7 United States - BUSPROG: Analytic American Business Today Bloom's: Knowledge 236 Because of technology and the Internet, the use of information by business managers has increased a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: True Easy p 25 FOBU.PRID.15.1-7 United States - BUSPROG: Analytic American Business Today Bloom's: Knowledge 237 During the 1930s, government became deeply involved in business for the first time a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: True Moderate p 23 FOBU.PRID.15.1-7 NATIONAL STANDARDS: United States - BUSPROG: Analytic TOPICS: American Business Today KEYWORDS: Bloom's: Comprehension 238 According to global experts, India is the fastest-growing economy in the world a True b False ANSWER: POINTS: DIFFICULTY: REFERENCES: LEARNING OBJECTIVES: NATIONAL STANDARDS: TOPICS: KEYWORDS: False Moderate p 24 FOBU.PRID.15.1-7 United States - BUSPROG: Analytic American Business Today Bloom's: Comprehension